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Deductions from the employee's remuneration

Created: 2018.03.26 / Updated: 2018.03.26 08:58

The Ministry of Social Security and Labour and the State Labour Inspectorate have been receiving information that unscrupulous employers have been unlawfully collecting funds from employed third-country nationals for the purpose of covering losses which might be inflicted upon the employer in the future, making use of the fact that they do not know Lithuanian laws, do not speak the state language and are afraid of applying to institutions.

Should you have any questions regarding legal employment relationship, please contact the STATE LABOUR INSPECTORATE for a consultation. Consultations are provided by phone: (8 5) 213 9772 (+370 521 39 772) or in writing (having filled in an electronic inquiry form or through Facebook).

Please find below the explanation of such collection of funds:

  • Collection of funds for the purpose of compensation for damage possibly caused by the employee to the employer in the future is UNJUSTIFIED AND UNLAWFUL.

  • Deductions from the employee’s remuneration can ONLY be made IN ACCORDANCE WITH THE PROVISIONS OF THE LABOUR CODE.

  • Deductions from remuneration regarding compensation for damage can ONLY be made UPON ESTABLISHMENT BY THE EMPLOYER OF VIOLATION OF THE EMPLOYEE’S WORK-RELATED DUTIES DUE TO THE FAULT OF THE EMPLOYEE.

  • THE LIMITS OF COMPENSATION FOR DAMAGE – not exceeding the employee’s average remuneration multiplied by 3 (where material damage was caused by employee’s gross negligence – not exceeding the employee’s average remuneration multiplied by 6).

  • CASES OF FULL COMPENSATION FOR DAMAGE BY EMPLOYEES: intentional damage; damage done by the employee’s activity in which constituent elements of a crime are present; damage done by the employee who was drunk or intoxicated with narcotic, toxic or psychotropic substances; the damage is done upon violating a non-compete agreement or the duty to protect confidential information; non-material damage inflicted upon the employer; full compensation is stipulated in a collective agreement.

  • THE EMPLOYER’S WRITTEN INSTRUCTION ON THE RECOVERY OF DAMAGES FROM THE EMPLOYEE has to be issued no later than within 3 months from the date when the damage was established. The amount of deduction cannot exceed the employee’s average wage per month. If the employer misses this time limit or seeks recovery of a bigger amount of deduction, he cannot do this arbitrarily but has to address the Labour Dispute Committee (a tripartite regional body in which decisions are made by the representatives of trade unions, employers and the State Labour Inspectorate of that region).

  • Upon the employer’s written instruction on the recovery of damages from the employee’s remuneration MAXIMUM AMOUNTS OF DEDUCTIONS provided for in the Labour Code must be adhered to. It means that the amount of deductions from a wage that does not exceed the minimum monthly salary (EUR 400 as of 1 January 2018) cannot exceed 20% of the wage payable to the employee; 70% of the wage payable to the employee may be deducted from the part of the wage exceeding the minimum monthly salary.

  • If a person believes that recovery of damages is unjustified and/or does not comply with the procedure of recovery of damages provided for in the Labour Code, he has the right to apply to the LABOUR DISPUTE COMMITTEE within 3 months from the date when the person learnt or had to learn about violation of his rights. The contacts of labour dispute commissions are available athttps://www.vdi.lt/Forms/DGK_kontaktai.aspx.

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